Correlation Between Rush Enterprises and AutoNation
Can any of the company-specific risk be diversified away by investing in both Rush Enterprises and AutoNation at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Rush Enterprises and AutoNation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rush Enterprises A and AutoNation, you can compare the effects of market volatilities on Rush Enterprises and AutoNation and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rush Enterprises with a short position of AutoNation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Enterprises and AutoNation.
Diversification Opportunities for Rush Enterprises and AutoNation
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rush and AutoNation is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Rush Enterprises A and AutoNation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoNation and Rush Enterprises is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rush Enterprises A are associated (or correlated) with AutoNation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoNation has no effect on the direction of Rush Enterprises i.e., Rush Enterprises and AutoNation go up and down completely randomly.
Pair Corralation between Rush Enterprises and AutoNation
Assuming the 90 days horizon Rush Enterprises A is expected to generate 1.43 times more return on investment than AutoNation. However, Rush Enterprises is 1.43 times more volatile than AutoNation. It trades about 0.22 of its potential returns per unit of risk. AutoNation is currently generating about 0.15 per unit of risk. If you would invest 5,269 in Rush Enterprises A on August 24, 2024 and sell it today you would earn a total of 731.00 from holding Rush Enterprises A or generate 13.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rush Enterprises A vs. AutoNation
Performance |
| Timeline |
| Rush Enterprises A |
| AutoNation |
Rush Enterprises and AutoNation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Enterprises and AutoNation
The main advantage of trading using opposite Rush Enterprises and AutoNation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Enterprises position performs unexpectedly, AutoNation can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AutoNation will offset losses from the drop in AutoNation's long position.| Rush Enterprises vs. CarGurus | Rush Enterprises vs. Kingsway Financial Services | Rush Enterprises vs. Driven Brands Holdings | Rush Enterprises vs. Group 1 Automotive |
| AutoNation vs. Sonic Automotive | AutoNation vs. Lithia Motors | AutoNation vs. Asbury Automotive Group | AutoNation vs. Penske Automotive Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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